Easy ways to avoid financial pitfalls in 2013

The start of the New Year is a good time to get your finances in order, but a recently released survey has found a surprising number of people have overlooked some of the most basic financial precautions.

Karen Mendelsohn and her husband, Harold, had been married for 10 years when he went to take a jog and never came back. He was only 40-years-old.

“He suffered a sudden heart attack. It was horrible and they couldn’t revive him,” said Karen Mendelsohn.

The second blow came when she discovered neither she nor their two young children were named as the beneficiaries on his pension. Harold had neglected to change the information. When Karen asked the company about the problem, she was told there was nothing they could do.

Consumer Reports says financial oversights are all too common. Its survey found that in the last five years, 86 per cent of respondents had not checked or updated important estate documents, including wills and beneficiary designations.

Another frequent mistake couples make is having only one person in charge of the finances. Consumer Reports’ survey found with 70 per cent of married couples, only one spouse knew key details about their accounts.

And if you are over 60 and have adult children, it’s time to let them know where that important information is as well.

Other “money stumbles” include insufficient insurance to cover full replacement of personal property at today’s prices. The survey found 50 per cent of homeowners fell into that category.

More than 70 per cent didn’t have at least three months of living expenses set aside in case of job loss or illness.

Consumer Reports says while you may not solve everything all at once, just taking those first simple steps may save you and your family a lot of heartache down the road.

In addition to regularly updating estate-planning documents, Consumer Reports recommends designating a file cabinet or safety deposit box for your will, insurance policies, and a list of all important account and investment information.

More of Consumer Reports’ best practices for handling your money are available here.

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A recently released survey has found a surprising number of people have overlooked some of the most basic financial precautions.